Tribunal Cancels Penalties for Importer in Customs Act Appeal

The Tribunal allowed the appeal, canceling the penalties imposed under Sections 114A and 114AA of the Customs Act, 1962. The appellant, who imported goods with a license obtained against fake shipping bills, demonstrated vigilance as a buyer by purchasing the license in good faith from the market and registering it with Customs authorities. The Tribunal found that the penalties could be waived in cases of bonafide belief without malafide intention to commit fraud. The appellant's lack of awareness regarding the license's authenticity, attributed primarily to the DGFT, led to the cancellation of the penalties.

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Issues:
1. Penalty imposition under Section 114A and Section 114AA of the Customs Act, 1962 for importing goods with a license obtained against fake shipping bills.

Analysis:
The appellant imported camera accessories under a transferable scrip issued under the Focus product scheme authorization by the DGFT, New Delhi, benefiting from Notification No. 92/2009-Cus. The department discovered that the license was obtained against forged shipping bills, leading to the imposition of penalties under Sections 114A and 114AA of the Customs Act, 1962. The appellant contended that they had already paid the duty and interest, with the penalties being the only issue in question. The appellant argued that they purchased the license in good faith from the market, registered it with Customs authorities, and made payment through a banking channel, claiming no malafide intention. The appellant cited various case laws to support their argument.

The Revenue, represented by the ld. AR, upheld the findings in the impugned order, asserting that penalties are mandatory in fraud cases once duty is paid. The AR referred to a decision by the Punjab & Haryana High Court in Friends Trading Co. vs. Union of India to support this stance. After hearing both sides and examining the records, the Tribunal noted that the appellant purchased the import license from the market, issued by the DGFT, and registered with Customs authorities, demonstrating vigilance as a buyer. The Tribunal applied the maxim EX ALUN DANTI CAUTELA to emphasize the appellant's vigilance.

Considering the case laws cited and the circumstances, the Tribunal found that the penalties could be waived in cases where a bonafide belief exists without any malafide intention to commit fraud. It was established that the appellant acted as a vigilant buyer, unaware of the license's authenticity, with the failure primarily attributed to the DGFT. The Tribunal concluded that this was a fit case to cancel both penalties due to the appellant's bonafide belief and lack of malafide intention. Consequently, the Tribunal allowed the appeal filed by the appellant, canceling the levy of penalties.

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